(Amendments to be moved by Senators Cormann,
Cash, Back, Eggleston and Adams in committee of the whole)

(1) Page 214 (after
line 3), at the end of Part 8, add:

Division 5—Modified formula for
activities using a different type of feedstock

173D Requirements for the
emissions-intensive trade-exposed assistance program

The emissions-intensive trade-exposed assistance program must
provide that a modified formula apply for the issue of free
Australian emission units in respect of a facility that engages in
an activity that is within a minority group in an industry based on
the type of feedstock it uses, in accordance with this
Division.

173E Interpretation

In this Division:

general EITE formula means the
formula for working out the number of free Australian emissions
units to be issued to an applicant in respect of an
emissions-intensive trade-exposed activity carried on during a
specified period.

173F Application

(1) The applicant may apply to the Authority:

(a) for a facility existing before 1 January 2011, no later
than 1 July 2011; or

(b) for a facility which comes into existence on or after 1
January 2011, within 6 months of the commencement of construction
of the facility;

for the Authority to issue a certificate (a
varied feedstock certificate ) modifying the general
EITE formula for:

(c) the facility specified in the certificate; and

(d) the emissions-intensive trade-exposed activity carried on
at the facility.

(2) The application must be accompanied by:

(a) a statement of the definition of the activity in respect
of which the application is made, including details of:

(i) a description of the defined activity; and

(ii) exclusions such as sub-activities or elements of
production; and

(iii) any other information requested by the Authority;

(b) a statement, evidence and details of the type of
feedstock the applicant activity uses;

(c) a statement of the type of feedstock the rest of the
entities carrying out the same activity as the applicant activity
use;

(d) a statement evidencing that the applicant’s
activity is within a minority group based on the type of feedstock
it uses. For this purpose, the facility forms part of a
minority if:

(i) less than 20% of the total participants undertaking the
same defined activity in Australia as the applicant are using an
alternative feedstock to natural gas; or

(ii) less than 50% of the total participants in Australia,
but no more than 3 participants, undertaking the same defined
activity as the applicant use an alternative feedstock to natural
gas,

(f) in relation to paragraph (e), a statement from an
independent expert specifying:

(i) the scale and scope of international data available;
and

(ii) how representative the evidence in paragraph (e) is of
world production for that activity; and

(iii) the consistency of data with the activity definitions;
and

(iv) the existence of knowledge gaps in the evidence and
information; and

(v) the existence of other evidence and information which may
be useful in determining the efficiency of Australian producers
with that of international counterparts, including information
relating to energy or electricity intensity;

(g) Australian evidence from an independent expert on the
emissions per unit of production, pricing and trade of the
applicant’s type of feedstock for its activity;

(h) a statement evidencing that a Department of Climate
Change registered assurance provider has been engaged;

(i) an explanation of how the modification, if permitted,
will impact upon the applicant;

(j) an explanation of how the modification, if permitted,
will impact upon the general EITE formula;

(a) prepare a draft varied feedstock certificate in respect
of the applicant’s facility, which sets out a new baseline
level of direct emissions per unit which reflects the weighted
average emissions per unit across all of the possible feedstock
types in relation to the applicant’s activity; and

(b) give a copy of the draft certificate to the applicant;
and

(c) notify the applicant, in writing, of the reasons why it
has prepared the draft certificate; and

(d) invite the applicant to comment about the draft
certificate within 30 days after the date of the invitation.

(4) The invitation is not an undertaking or guarantee that
the Authority will make a particular decision on the
application.

(5) If, after considering any comments about the draft
certificate received in accordance with subsection (3), the
Authority is satisfied that it is appropriate to issue a varied
feedstock certificate, the Authority must issue a certificate which
sets out, in respect of the applicant’s facility, a new
baseline level of direct emissions per unit.

The object of this Division is to provide financial incentives for
early investment in carbon capture and storage plant and equipment
in relation to eligible assets. It does so by providing limited
transitional assistance in respect of investment in carbon capture
and storage plant and equipment in relation to eligible assets
during the period up to and including the financial year
2024-25.

173H Interpretation

In this Division:

carbon capture and compression
means the capture, compression and, where necessary, conditioning
of emissions, prior the transportation of emissions to a storage
site capable of capturing and compressing emissions which are at
least:

(a) 99% pure carbon dioxide; and

(b) 1.0 barg.

carbon capture and storage
project means a project to construct and commission new
carbon capture and compression equipment. For this purpose, it is
immaterial whether the project has been completed.

coal gasification means a
manufacturing process that converts coal to a synthesis gas
(syngas, which is mainly carbon monoxide and hydrogen), which can
be further processed to produce chemicals, fertilizers, liquid
fuels, hydrogen, and electricity; coal gasification is not
combustion, but rather partial oxidation, meaning limited oxidant
is added.

EITE emission units , in respect
of a facility, means the number of free Australian emissions units
issued to a person in respect of the facility under the provisions
of the emissions-intensive trade-exposed assistance program, other
than this Division.

173I Issue of
free Australian emissions units in respect of c arbon capture
and storage

(1) The emissions-intensive trade-exposed assistance program
must provide for the issue of free Australian emissions units
( CCSR units ) in respect of a facility that:

(a) undertakes emissions-intensive trade-exposed activities;
and

(b) uses coal gasification technology; and

(c) is controlled or operated by persons that have invested,
or stand ready to invest, in carbon capture and storage ready plant
and equipment.

(2) CCSR units must not be issued to a person under this
Division unless the person:

(a) meets such requirements as are specified in the
emissions-intensive trade-exposed assistance program; and

(b) has a Registry account.

(3) The requirements of this Division are in addition to the
requirements of the other Divisions in this Part.

173J Requirements for assistance

(1) The Authority may issue a person with a certificate of
eligibility for carbon capture and storage ready assistance if:

(a) the person has applied for the issue of free Australian
emissions units under the emissions-intensive trade-exposed
assistance program; and

(3) In relation to one or more facilities to which an
application relates, as at 1 June 2011:

(a) carbon capture and compression plant and equipment is
installed at the facility; or

(b) a carbon capture and storage project is in existence but
has not been completed and the project is fully committed by the
project proponent, having regard to the following matters:

(i) the project proponent’s rights to land for the
construction of the project;

(ii) whether contracts for the supply and construction of
the project’s major plant or equipment (including
contract provisions for project cancellations) were executed;

(iii) the status of all planning and construction approvals
and licences necessary for the commencement of construction of the
project (including completed and approved environmental impact
statements);

(iv) the level of commitment to financing arrangements for
the project;

(v) whether project construction has commenced;

(vi) whether a firm date had been set for project
construction to commence.

(4) The applicant has not obtained or cannot reasonably
obtain, on reasonable economic terms, an off take arrangement or
storage option for the captured, compressed and conditioned carbon
during the financial years up to and including 2024-25.

(5) The applicant must provide the Authority with a
report:

(a) setting out the amount or volume of carbon which is
reasonably likely to be captured by the carbon capture and
compression plant and equipment in each year; and

(b) the date of installation of the carbon capture and
compression plant and equipment at the facility; and

(c) the technical specifications of the carbon capture and
compression plant and equipment at the facility; and

(d) whether the applicant considers that the carbon capture
and compression equipment at the facility meets the requirents of
this Division.

(6) A report complies with this subsection if:

(a) the report is prepared by a person who has appropriate
engineering qualifications; and

(b) the report sets out the person’s estimate of the
carbon capture and storage capability of the plant and equipment of
the facility; and

(c) the person does not have an interest, pecuniary or
otherwise, in the outcome of the application.

173K Further information

(1) The Authority may, by written notice given to an
applicant, require the applicant to give the Authority, within the
period specified in the notice, further information in connection
with the application.

(2) If the applicant breaches the requirement, the Authority
may, by written notice given to the applicant:

(a) refuse to consider the application; or

(b) refuse to take any action, or any further action, in
relation to the application.

173L Issue of certificate of eligibility for
carbon capture and storage ready assistance

Scope

(1) This section applies to a facility if:

(a) an application for the issue of free Australian emissions
units under the emissions-intensive trade-exposed assistance
program has been made in respect of the facility; and

(b) subsections 173J(2) to (6) apply in respect of that
application.

Issue of certificate

(2) After considering the application, the Authority may
issue a certificate of eligibility for carbon capture and storage
ready assistance in respect of the carbon capture and storage
project.

(3) A certificate of eligibility for carbon capture and
storage ready assistance must state that a specified number is the
number of units available for issue as CCSR units in respect of the
facility, for the purposes of the subsection 173M(3).

Timing

(4) The Authority must take all reasonable steps to ensure
that a decision is made on the application:

(a) if the Authority requires the applicant to give further
information under subsection 173K(1) in relation to the
application—within 90 days after the applicant gave the
Authority the information; or

(b) otherwise—within 90 days after the application was
made.

Refusal

(5) If the Authority decides to refuse to issue a certificate
of eligibility for carbon capture and storage ready assistance in
respect of the facility, the Authority must give written notice of
the decision to the applicant.

Publication of copy of certificate

(6) As soon as practicable after issuing a certificate of
eligibility for carbon capture and storage ready assistance in
respect of the facility, the Authority must publish a copy of the
certificate on its website.

(1) This section applies to a facility if a certificate of
eligibility for carbon capture and storage ready assistance is in
force in respect of the facility.

Issue of free units

(2) On 1 September in each eligible financial year
beginning from 1 July 2011 to 1 July 2024, the Authority must
issue CCSR units in respect of the facility in accordance with this
section.

(3) The number of CCSR units to be issued in respect of a
facility in each eligible financial year must be the lesser of:

(a) the number of units available; and

(b) number of units capable of being allocated;

where:

number of units available is
the number of Australia emissions units that represents the carbon
dioxide equivalence of the greenhouse gases capable of being
captured by the carbon capture and compression pant and equipment
installed at the facility.

number of units capable of being
allocated is the number of CCSR units which, if added to
the EITE emissions units, would cause the total number of free
Australian emission units issued to a person in respect of the
facility to equal number of units which represents the percentage
amount set out for that year in the following table:

Financial year

Percentage of free Australian emissions
units against actual emissions in each financial year (including
global recession buffer)